U.S. Should Choose Skilled Immigrants

February 8, 2001

Many immigrants to the United States are unskilled and less educated, since about three-quarters of them are admitted only because they have relatives here. About 12 percent of legal immigrants are admitted for their special skills; but the system for defining desirable occupational capabilities is archaic, so only about 5 percent of legal immigrants actually bring valuable technical or professional skills.

The U.S. would be better off if immigrants were highly skilled, says Harvard University economist George Borjas.

Skilled immigration therefore increases the after-tax income of natives.

Because businesses become more productive when machinery is combined with a skilled worker, American firms would gain more if the immigrant flow were composed of skilled workers.

The gains from skilled immigration would be even larger if the knowledge, skills and abilities that immigrants bring in can somehow be picked up by natives who interact with them.

How can the United States select skilled workers from its very large pool of visa applicants? The solution might be a point system like the ones used by Canada, Australia and New Zealand. Applying immigrants could be graded in terms of their age, educational attainment, work experience, English language proficiency and occupation. Those applicants who score enough points would qualify for entry, while those who fail the test are denied entry.

But if enough immigrants with the desired skills don't apply for immigration, the U.S. could either raise the price it is willing to pay (by offering incentives to immigrants with the desired skills), or withdraw from the market and wait for economic conditions that will bring the types of workers most beneficial for the country.

Source: George Borjas, "The Case for Choosing More Skilled Immigrants," American Enterprise, December 2000.